The governor bank of Uganda Tumusiime Mutebile has ordered commercial banks to reduce their lending rates because the Central Bank has also lowered the Central Bank Rate.

The rate at  which Bank of Uganda lends to commercial banks standards at  17% in this month of August 2012 down from 19% in July the same year.

Mutebile announced this on Thursday morning in Kampala while he was issuing the Monetary Policy Statement for the month of August. Tumusiime-Mutebile urged the commercial banks to to lower their lending rates saying that this will attract more borrowers.

Mutebile says that the Bank of Uganda is happy that the inflationary pressures have been subdued and the forecasts point to inflation dropping to single digits in the next two to three months.